Digital Economy seen as lifeline by business leaders, Malaysia study reveals

While more than half of business leaders in Malaysia believe the business environment will worsen in the next 12 months, their sentiment remains positive, according to a new study conducted by Monash University and CPA Australia.

More than half of the businesses in Malaysia believe that the business environment will worsen in the next twelve months, according to a new business sentiment survey conducted by Monash University Malaysia and CPA Australia.

However, the study also noted that despite a 'restrained business environment and in an election year, the spirit of the local business community remained optimistic with 58 percent confident or somewhat confident about their business prospects. This optimism is partly due to increased infrastructure investment and increased domestic consumption, boosted by the various corridor development programmes [including the Digital Economy drive] under the 11th Malaysia Plan and the 2017 Budget."

"The Survey looked at the challenges Malaysian businesses face, and the options they are considering to navigate the complex dynamics being played out in their immediate environments," said Prof Pervaiz.

The topmost challenge was the increasing cost of doing business, which has impacted the bottom-line of local firms, he said. The second major issue was the weakening Malaysian currency, which has severely impacted those firms dependent on imported goods for their production process.

Prof Nair explained that the study set out to probe the current opinions, voice and feelings of the country's business leaders. "The Malaysian Business Sentiment Survey helps measure confidence of local business leaders across key macro-economic areas and provides them a platform to voice their sentiments and estimations about the business environment in Malaysia, and its impact on their global competitiveness."

The Malaysian Business Sentiment Survey 2016/2017 consisted of three (3) phases: Phase 1 was a scoping and content analysis of information from press releases, media reports, and commentaries from stakeholders; Phase 2 involved face-to-face in-depth interviews with CEOS and senior managers; and Phase 3 was an online survey with 194 randomly selected CEOs and senior managers across a wide spectrum of industries.

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"Events of the past year have been unprecedented and global markets have been extremely unstable," he added. "The survey has gauged the mood of the Malaysian business community and examined their apprehensions about today's volatile economy. Another objective of the survey was to enable policy-makers, industry bodies and other key stakeholders to adopt pro-active measures to improve the business environment and help local businesses build global competitive advantage."

Specific highlights from the survey include:

54 percent of businesses identified cost management as their prime strategic/investment priority over the next 12 months, followed by seeking new markets (48 percent), developing business relationships (34 percent), and new product development (30 percent) and marketing and branding activities (25 percent).

49 percent are of the view that there is a balance: both more opportunities and more threats now compared to 3 years ago.

More than one third of respondents (39 percent) informed that the government remains an important buyer of their products.

70 percent of the CEOs and senior managers responded that to stay competitive, the most important ability to cultivate is the ability to proactively manage the business using strategic foresight and thinking.

60 percent of the respondents reported that their sales priority over the next 12 months will be to concentrate on existing products/services, while at the same time explore new markets